<div id="readability-page-1">If you have been following Tesla (TSLA -1.38%) for the last decade, you will know that it has always attracted a cult following. The electric automaker is perceived as a technology disruptor that isn't afraid to push the envelope under the leadership of its controversial CEO, Elon Musk. And it has typically enjoyed a premium valuation compared to tangible performance metrics like revenue and earnings. But despite a nosebleed valuation, Tesla has historically proven its naysayers wrong, achieving its first full-year profit in 2020 and becoming the most profitable American automaker in 2022. The honeymoon period didn't last long. Three years later, Tesla is once again overvalued because of a dramatic drop in profits amid electric vehicle (EV) competition and consumer boycotts related to Elon Musk's political activism. Over the next ten years, the company will have to prove itself once again. Let's dig deeper to see how this might play out. <h2>Why Tesla needs to pivot</h2> America's most successful tech giants have a clear pattern. They often use the scale and infrastructure developed for their core business to establish a competitive edge in even bigger opportunities. Amazon used its e-commerce marketplace as an anchor tenant for its cloud-computing division, Amazon Web Services (AWS). Nvidia's video game graphics tech turned into the foundation for its leadership in generative AI hardware. Tesla aims to pull off a similar pivot with its auto business. Something clearly needs to change. Tesla's first-quarter earnings demonstrate that EV manufacturing is no longer capable of justifying an otherworldly valuation. For context, shares trade for a price-to-earnings (P/E) multiple of 184 compared to the S&amp;P 500 average of 28. Meanwhile, Tesla's total revenue fell 9% year over year to $19.3 billion, driven by an alarming 20% drop in total automotive sales due to intense consumer boycotts in the U.S. and Europe. Recent refreshes of the Model Y and Model 3 did little to stop the bleeding. And operating profits tanked 66% year over year to $399 million. New business verticals will likely be the only way for Tesla to regain a growth trajectory. <h2>Tesla's 10-year strategy</h2> Over the next ten years, Tesla's story will depend on its non-automotive revenue streams, which have likely always been part of its long-term strategy. Some of these businesses are already booming. For example, energy generation and storage revenue jumped 67% to $2.73 billion, representing around 14% of total sales. And because this business focuses on commercial and government clients, it is shielded from some of the brand erosion Tesla has seen among regular consumers. However, as time goes on, Tesla's self-driving and robotaxi businesses will likely determine the company's future. According to analysts at McKinsey and Company, autonomous driving could create $300 to $400 billion in revenue by 2035, and much of this will likely be high-margin software and services as the technology is potentially marketed as a recurring subscription or used for autonomous taxi services. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjI1MjQvZ2V0dHlpbWFnZXMtMTczMzIxMzEzOC0xLmpwZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="393" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjI1MjQvZ2V0dHlpbWFnZXMtMTczMzIxMzEzOC0xLmpwZyZ3PTcwMA"/>Image source: Getty Images. </div> As an automaker, Tesla has a tremendous advantage over its primary U.S. rival, Waymo, which must source its cars from expensive third parties that are vulnerable to tariffs. Tesla's focus on inexpensive cameras and computer vision could also help make its strategy more scalable than Waymo's expensive combination of LiDAR, radar, and other sensors. Tesla robotaxi service launched in Austin, Texas, this month. And while early operations will be geofenced to areas the company considers to be safest, the program could generate valuable training data and help set the stage for larger-scale commercialization in the future. <h2>Is Tesla stock a buy?</h2> Tesla clearly has the potential to justify its sky-high valuation through new growth opportunities like self-driving cars. Over the next 10 years, the company can regain its growth trajectory as these new opportunities defray weakness in its core automotive operations. That said, Tesla still doesn't look like a compelling buy because success is already priced into the stock. Furthermore, Elon Musk's political antics have created a cloud of uncertainty over the company that could severely impact its ability to pioneer new and often controversial technologies. Investors should wait for a lower price before buying shares. </div>

TSLA

Tesla's stock has been a topic of interest due to its high valuation and recent profit declines amid increased competition and consumer boycotts. The company aims to pivot towards non-automotive revenue streams, particularly in energy generation and autonomous driving, which could significantly boost future earnings. However, analysts suggest that while Tesla has potential, the stock may not be a compelling buy at current prices due to uncertainties surrounding Elon Musk's political actions and the already high expectations priced into the stock.

- Tesla has historically maintained a high valuation despite recent profit declines due to increased competition and consumer boycotts linked to CEO Elon Musk's activism.  
- The company's future growth will depend on diversifying its revenue streams, particularly through energy generation and autonomous driving, which could generate significant revenue by 2035.  
- While Tesla has potential for recovery, current stock prices reflect anticipated success, and investors are advised to wait for a more favorable entry point.

Where Will Tesla Stock Be in 10 Years?